Mandatory Retirement Plans

Unclassified (exempt from NJ Civil Service) employees are typically enrolled into the Alternate Benefit Program (ABP) mandatory retirement plan.

Classified/Career Service employees are typically enrolled into either the Public Employees' Retirement System (PERS) or the Police and Firemen's Retirement System (PFRS) mandatory retirement pension plans.

Not sure if you are in a Classified/Career Service or Unclassified position?  Clarification regarding positions designated as Unclassified and Classified/Career Service can be found here. 

 

  • Mandatory Retirement Pension Plans for Classified/Career Service Employees

  • 1. Contribution Rates:

    Contribution Rates for members of the Public Employees' Retirement System (PERS)

    • The current contribution rate is 7.5%.

    Contribution Rates for members of the Police and Firemen's Retirement System (PFRS)

    • The current contribution rate is 10.0%.

    2. Life Insurance Coverage

    Group Life Insurance coverage is available to members of the state retirement systems without a medical examination if they are age 60 or younger at the time of their enrollment in the pension plan.

    For detailed information, click here.

    3. Pension Loans

    To be eligible to borrow from your pension account (PERS or PFRS) you must meet the following requirements:

    1. Be an active, contributing member of an eligible New Jersey State-administered retirement system
    2. Have three years of contributing membership posted to your account. Pension contributions/ service credit are updated and posted to your account on a quarterly basis
    3. Request no more than two loans in any calendar year
    4. Total outstanding loan balance must be repaid within five years
    5. Be actively employed when the application for a loan is filed.

    An employee may borrow amounts from $50 up to one-half of posted contributions provided that their total outstanding loan balance will not exceed $50,000. If an employee retires, the monthly loan repayment schedule can continue into retirement.

    An eligible member who wishes to borrow against their pension account, MUST submit the loan request application online via their Member Benefits Online System (MBOS)

    Additional information on Pension Loans is available below:

    4. Purchase of Service

    Since your retirement allowance is based in part on the amount of service credit posted to your account at the time of retirement, it may be beneficial for you to purchase additional service credit if you are eligible to do so. The following types of service are eligible for purchase:

    • Temporary/Substitute Service
    • Leave of Absence
    • Former Membership
    • Layoff (PFRS only)
    • Local Retirement System Service
    • Out-of- State Service
    • US Government Service
    • Employment with Other Agencies (PFRS)
    • Optional Service
    • Uncredited Service
    • Military Service

    An eligible member who wishes to purchase service, MUST submit the purchase request online via their Member Benefits Online System (MBOS)

    Additional information on Purchasing Service Credit is available below:

    5. Withdrawing Contributions

    If the employee ceases to be an active member for any cause other than death or retirement, he/she may withdraw all his/her contributions less any outstanding loan or other obligation that may have been charged to the account. Upon withdrawal, all rights and privileges of membership end.

    To withdraw, the employee must file a properly completed withdrawal application online via their Member Benefits Online System (MBOS)

    Additional information on Withdrawals is available below:

    6. Retirement Under Public Employees' Retirement System (PERS)

    Information on the different types of retirements (Service, Early, Veteran, Disability & Deferred) is available below:

    7. Retirement Under Police and Firemen's Retirement System (PFRS)

    Information on the different types of retirements (Service, Special, Deferred, Disability & Mandatory) is available below:

    8. Retirement Procedures for Members of the PERS and PFRS Pension Systems

    When an employee is contemplating retirement, he/she may request a pension estimate from the NJ Division of Pensions & Benefits.

    • Members within two years can get a retirement estimate online using the Member Benefits Online System (MBOS). The estimate uses the service and salary information currently posted to your account.

    • Members who are more than two years from retiring can estimate their retirement allowance using fact sheet below:

    Once a retirement date is determined:

    9. Health Coverage at Retirement

    Any employee retired from a State-administered pension fund will be eligible to continue participation in the State Health Benefits Program, provided they were eligible for coverage immediately preceding the effective date of retirement.

    A Retired Status Application furnished by the NJ Division of Pensions and Benefits must be completed in its entirety by the employee for continuation of health coverage during retirement. This coverage includes medical and prescription drug plans. The dental may be continued through COBRA.

    State-Paid Health Benefits in Retirement

    To qualify for State-Paid Health Benefits in retirement, employees need 25 years or more of service credit in a State-administered retirement system (PERS, TPAF, etc.) at time of retirement.

    Additional information on Retiree Health Benefits is available below:

    Medicare Coverage at Age 65

    Retired group members eligible for Medicare must enroll in Parts A and B of Medicare. Upon enrollment in Medicare, the SHBP becomes a secondary provider. If the retiree and their spouse are age 65 at retirement and have not enrolled in both parts of Medicare, they should contact Social Security to apply for full Medicare coverage at this time.

    Additional information on Medicare Coverage is available below:

    What happens to a spouse's health coverage if the retiree predeceases?

    Upon the retiree's death the spouse will be sent a letter offering continuation of the SHBP coverage which was in effect at the time of the retiree's death.

    • If premiums were being deducted through monthly annuity payments and if the spouse will be receiving a monthly check large enough to cover the cost, the cost will be deducted monthly.
    • If the retiree was paying SHBP directly, or if the spouse will not receive a pension check, or if the pension check is not large enough to cover the cost, the spouse will be billed quarterly for the premiums.
    • If the retiree and their spouse were receiving employer paid health coverage prior to the retiree's death, the spouse must now pay for the continued coverage.

    Additional information on Death of a Member is available below:

    10. Lump Sum Payment of Unused Sick Leave

    Upon retirement from a State administered pension fund, The University will make a lump sum payment to retirees as supplemental compensation for earned and unused sick leave.

    The following employees will be eligible: all classified employees of the State and all unclassified administrators of the State. Faculty who have served in an administrative capacity are eligible for this payment for the time served in an administrative capacity only. Such employees, if eligible, shall be entitled to payment based on sick leave and salary earned while serving in the administrative title.

    The amount to be paid to eligible employees for unused sick leave shall be computed at the rate of one-half the employee's daily rate of pay for each day of earned and unused accumulated sick leave up to a maximum of $15,000.

    • The daily rate of pay is based on the employees annual base salary received during the last full year of active employment.
    • Overtime pay or other supplemental pay and periods of leave of absence without pay shall not be included in the computation.

    An individual eligible for lump sum unused sick leave payment may defer the payment for up to one year from the effective date of retirement.

  • Mandatory Retirement Program for Unclassified Employees

  • Alternate Benefit Program (ABP)

    The Alternate Benefit Program (ABP) is a defined contribution retirement program for eligible employees of the public institutions of higher education in New Jersey. In addition to retirement benefits, the ABP provides members with life insurance and disability coverage.

    The program allows members to direct their own retirement accounts while offering portability of accumulated contribution balances.

    • Vested members are permitted to allocate and transfer employer and employee contributions to any one or combination of authorized investment carriers.
    • The variety of investment choices and distribution methods offered by the authorized carriers provide members flexibility in meeting their retirement goals.

    Additional information of the Alternate Benefit Program is available below:

    Summary of Benefits

    • Member contributions on a tax-deferred basis
    • Tax-deferred employer contributions
    • Employer-provided group life insurance for eligible active and retired members
    • Disability benefits if permanently disabled
    • Loans through the member’s investment carrier(s)
    • A variety of retirement plan options, including lump sum distribution
    • State-paid health insurance coverage in the State Health Benefits Program if the member retires and has 25 years of ABP service.

    1. Mandatory Contributions

    The member and employer make regular tax-deferred contributions toward retirement savings. Members contribute 5% of base salary and employers contribute 8% of base salary.

    2. Life Insurance (Active)

    Employer-paid group life insurance is provided for all eligible members. No medical examination is required unless the member attained the age of 60 prior to enrollment. Coverage equals 3 ½ times base salary.

    3. Life Insurance (Retired)

    Retired members are eligible for paid group life insurance coverage of one-half of base salary if all of the following criteria are met: 

    • 10 years or more of pension service credit
    • At least age 60 at retirement
    • Take a $1000 distribution within 30 calendar days of the retirement date, and
    • Covered by ABP group life insurance plan immediately prior to retirement

    4. Life Insurance Conversion

    When life insurance coverage reduces or ends (at retirement, termination of employment or approved leave of absence), members can convert all or a portion of group life insurance to an individual policy within 31 days by contacting Empower (formerly Prudential) at 1-855-364-7783.

    Additional information on Life Insurance Conversion is available below:

    5. Long-term Disability

    Members are eligible for employer-paid long-term disability after one year of participation in ABP.

    • Benefits begin after six months of continuous disability.
    • The plan pays 60% of monthly base salary (reduced by other periodic benefits such as short-term disability or Social Security), if totally and permanently disabled.
    • The minimum benefit is $50 per month.

    In addition, the basic 5% contribution that the member would have been required to make while actively working, is made by the carrier (Prudential Insurance Company). The employer continues to contribute 8% of base salary.

    Additional information on Long Term Disability is available below:

    6. Loans

    Vested members of the Alternate Benefit Program are eligible to receive loans based on their account balances. Members should contact their investment carrier(s) for applications and repayment procedures.

    7. Retirement and Cash Distributions

    A member of the ABP becomes eligible to commence distributions at any age upon termination of employment or retirement.

    • Members may receive benefits in the form of an annuity or cash distribution.
    • Annuity benefits will be calculated by the investment carrier(s) based upon the account accumulation, life expectancy and the distribution option selected.
    • Cash distributions to members under the age of 55 are limited to their employee contributions and accumulations. The remaining employer contributions and earnings are available for distribution upon attaining age 55.

    Once a member starts collecting benefits from their ABP account (annuity or cash) they are not eligible to enroll in any New Jersey state-administered retirement system nor are they eligible to re-enroll in the Alternate Benefit Program.

    8. Employment After Retirement

    Retired ABP members can return to public employment (including employment covered by ABP) and continue to receive benefits. However, retired members are not eligible for group life insurance or disability insurance. Additionally, retired members will not accrue service credit toward employer-paid health coverage.

    Certain restrictions may apply to the benefits and features described. For more information, contact The Office of Human Resources or the Division of Pensions and Benefits.

    Additional information on Employment After Retirement is available below:

    9. Health Coverage at Retirement

    Any employee retired from a State-administered pension fund will be eligible to continue participation in the State Health Benefits Program, provided they were eligible for coverage immediately preceding the effective date of retirement.

    A Retired Status Application furnished by the Division of Pensions and Benefits must be completed in its entirety by the employee for continuation of health coverage during retirement. This coverage includes medical and prescription drug plans only. The dental may be continued through COBRA.

    State-Paid Health Benefits in Retirement

    To qualify for State-Paid Health Benefits in retirement, employees need 25 years or more of service credit in a State-administered retirement system (PERS, TPAF, etc.) at time of retirement

    Additional information on Retiree Health Benefits is available below:

    Medicare Coverage at Age 65

    Retired group members eligible for Medicare must enroll in Parts A and B of Medicare. Upon enrollment in Medicare, the SHBP becomes a secondary provider. If the retiree and their spouse are age 65 at retirement and have not enrolled in both parts of Medicare, they should contact Social Security to apply for full Medicare coverage at this time.

    Additional information on Medicare Coverage is available below:

    What happens to a spouse's health coverage if the retiree predeceases?

    Upon the retiree's death the spouse will be sent a letter offering continuation of the SHBP coverage which was in effect at the time of the retiree's death.

    • If premiums were being deducted through monthly annuity payments and if the spouse will be receiving a monthly check large enough to cover the cost, the cost will be deducted monthly.
    • If the retiree was paying SHBP directly, or if the spouse will not receive a pension check, or if the pension check is not large enough to cover the cost, the spouse will be billed quarterly for the premiums.
    • If the retiree and their spouse were receiving employer paid health coverage prior to the retiree's death, the spouse must now pay for the continued coverage.

    Additional information on Death of a Member is available below:

    10. Lump Sum Payment of Unused Sick Leave

    Upon retirement from a State administered pension fund, The University will make a lump sum payment to retirees as supplemental compensation for earned and unused sick leave.

    The following employees will be eligible: all classified employees of the State and all unclassified administrators of the State. Faculty who have served in an administrative capacity are eligible for this payment for the time served in an administrative capacity only. Such employees, if eligible, shall be entitled to payment based on sick leave and salary earned while serving in the administrative title.

    The amount to be paid to eligible employees for unused sick leave shall be computed at the rate of one-half the employee's daily rate of pay for each day of earned and unused accumulated sick leave up to a maximum of $15,000.

    • The daily rate of pay is based on the employees annual base salary received during the last full year of active employment.
    • Overtime pay or other supplemental pay and periods of leave of absence without pay shall not be included in the computation.

    An individual eligible for lump sum unused sick leave payment may defer the payment for up to one year from the effective date of retirement.